Let the Trades Develop

 | Dec 19, 2012 | 4:37 PM EST
  • Comment
  • Print Print
  • Print

The market has enjoyed a very nice run lately, but after terse comments from politicians about a fiscal-cliff deal, worries developed and profit-taking ensued. The pullback was mild given how much the market has run, but the political theater was taken a little more seriously as the deadline for action nears.

My thesis recently has been that market players will remain optimistic despite the rhetoric until we are close to the deadline.  With the holidays quickly approaching the real deadline is probably this Friday, and if something isn't nailed down by then, I expect to see more selling.

This is really a tough environment as end-of-year tendencies are trumped by the political debate. This time of year, stocks are less likely to move on their individual merits because tax issues, profit-taking and portfolio management drive the action. But it is even more difficult as we are so sensitive to the news headlines out of Washington.

The best advice I can give is to manage positions closely and don't be too focused on the news flow. If a stock doesn't act right, sell it and move on.  If you have trouble putting cash to work, like me, then don't force it. Just keep pulling away and let the trades develop. The news is going to jerk us around, and we need to be aware that it may mess up what looks like a good trade.

Have a good evening. I'll see you tomorrow.

Columnist Conversations

with the market getting a bit frothy here, we'll add some put protection. this is 2X normal size BOUGHT SPY...
Wendy's is extending last week's rally with another 2% of upside.  The stock is working on a 6 day winnin...
We have a nice win here, but want to stay on the name. SOLD HLF MAY 57.5 CALL AT 5 (in at 3.30) BOUGHT H...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.